New Zealand is strengthening its economic and strategic engagement with India as it seeks to diversify its international partnerships amid changing dynamics in the Indo-Pacific region, according to an analysis published in The Diplomat. The signing of the New Zealand-India Free Trade Agreement (FTA) and Prime Minister Narendra Modi’s visit to New Zealand on July 11 have been described as signs of Wellington’s efforts to expand its economic and security relationships beyond its traditional dependence on China.

For several decades, China remained one of New Zealand’s most important economic partners, particularly in trade. However, the new FTA with India reflects a broader attempt by New Zealand to build stronger links with one of the world’s fastest-growing major economies. The Indian government has said the agreement will provide new opportunities for labour-intensive sectors such as textiles and leather, while New Zealand has highlighted expanded market access for its businesses.

New Zealand Trade Minister Todd McClay said the agreement would remove or reduce tariffs on 95 per cent of exports, including products such as kiwifruit, apples, meat, wool, coal and forestry goods. The deal is expected to provide New Zealand companies greater access to India’s growing consumer market, while also encouraging increased trade and investment between the two countries.

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The agreement is also being viewed as part of New Zealand’s strategy to reduce risks linked to excessive dependence on a single trading partner. The analysis noted that Wellington has become increasingly aware of supply chain vulnerabilities and the possibility of economic relationships being influenced by broader political considerations. India’s expanding economy, which is expected to maintain growth of over 6 per cent in coming years, has emerged as an important alternative market for New Zealand businesses.

During Prime Minister Modi’s visit, India and New Zealand elevated their bilateral relationship to a “strategic partnership” and announced greater cooperation in areas beyond trade. The two countries agreed to establish a joint working group on counterterrorism, strengthen cybersecurity cooperation, improve intelligence exchanges and deepen maritime defence ties.

The partnership also includes the “Roadmap to 2030” framework and builds on the March 2025 Defence Cooperation Arrangement, which created regular bilateral defence discussions. New Zealand Prime Minister Christopher Luxon said the country’s interests in the Indo-Pacific increasingly involve both economic and security considerations, reflecting the region’s evolving strategic environment and the need for stronger partnerships.

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